The VA construction loan draw schedule is one of the most important — and least explained — parts of the entire building process. Get it wrong and your builder walks off the job. Get it right and your home gets built on time without a cash flow crisis.
Here is how it works.
What Is a Draw Schedule
A draw schedule is a payment plan between your lender and your builder. Instead of handing over the entire loan amount at closing, the lender releases funds in stages as construction milestones are completed.
Each payment is called a draw. Your builder completes a phase of work, an inspection confirms it, and the lender releases the next portion of funds. This protects you, the lender, and ensures the builder is paid for work actually completed.
How Many Draws Are Typical
Most VA construction loans use between four and six draws. The exact number depends on your lender and the complexity of your build.
A typical five-draw schedule looks like this:
Draw one covers site preparation, foundation, and framing. Draw two covers roofing, windows, and exterior work. Draw three covers rough plumbing, electrical, and HVAC. Draw four covers insulation, drywall, and interior finishes. Draw five is the final draw at completion and certificate of occupancy.
Some lenders use fewer draws with larger amounts per stage. Others use more draws with tighter milestone controls. Ask your lender for their specific schedule before you sign anything.
The Inspection Requirement
Before each draw is released, the lender orders an inspection to verify the work is complete. This is not optional and it is not fast.
Inspections typically take three to seven business days to schedule and complete. That means your builder may finish a phase and then wait a week or more before the next payment arrives.
This is one of the most common sources of friction in VA construction loans. Builders who are not experienced with VA loans sometimes get frustrated with the inspection delays. Make sure your builder understands the process before construction begins.
Who Pays the Inspector
The borrower typically pays for each draw inspection. Costs range from $150 to $300 per inspection depending on your location and lender requirements.
On a five-draw schedule that is $750 to $1,500 in inspection fees over the course of your build. Budget for this upfront — it is a real cost most veterans do not anticipate.
What Happens If a Draw Is Short
Sometimes an inspection reveals incomplete work and the lender releases only a partial draw or holds the full draw until deficiencies are corrected.
If this happens, your builder is responsible for completing the work before the next payment is released. This is exactly how the system is supposed to work — it protects you from paying for work that has not been done.
Document everything during your build. Photographs of each phase before and after inspection give you leverage if there is ever a dispute.
Matching the Draw Schedule to Your Builder Contract
Your builder contract should mirror your draw schedule exactly. If your lender releases draw three after rough mechanical work is complete, your builder contract should reflect the same milestone.
Misaligned schedules create disputes, delays, and sometimes litigation. Review both documents side by side before your build begins. If they do not match, get them aligned before you break ground.
The Bottom Line
The VA construction loan draw schedule controls the flow of money from your lender to your builder throughout the build. Understanding it before you start protects your investment and keeps your project moving.
Know your milestones. Know your inspection timeline. And make sure your builder has done this before.
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